Thailand’s Cryptocurrency Regulations Expected to be Implemented in 2024

Cryptocurrency has completely transformed the global financial industry, prompting governments around the world to establish regulatory frameworks to monitor and regulate this innovative form of digital currency. Thailand, known for its thriving crypto market, has been at the forefront of implementing cryptocurrency regulations. In this chapter by Coinpedia, we will explore the basics of crypto regulations in Thailand in 2024.

Introduction
Thailand has been an early adopter of cryptocurrency regulations, making it a leading example for other countries. Cryptocurrencies are not considered legal tender in Thailand. The Royal Decree on Digital Asset Business, issued in May 2018, categorizes crypto assets and NFTs as “digital assets.” This means that digital assets can be issued, traded, or exchanged by licensed digital asset business operators. This indicates that the Thai government is open to accommodating crypto-based assets. The Securities and Exchange Commission of Thailand governs digital assets through the Royal Enactment on Digital Asset Businesses (REDA).

The Timeline
Crypto exchanges, brokers, and dealers in Thailand are required to obtain licenses from the SEC Thailand. However, local banks and financial institutions are currently prohibited from directly participating in crypto transactions.

The Early Stages:
– 2014: The Bank of Thailand issued a statement declaring that Bitcoin is not a currency and comes with its own risks.
– 2017: In July, the UNOCS Regional office for Southeast Asia and Pacific held a meeting in Thailand to enhance its ability to trace and investigate cryptocurrencies.
– 2018: Thailand took significant steps to establish a comprehensive regulatory framework for cryptocurrencies. In May 2018, the Thai Ministry of Finance introduced an Emergency Decree on Digital Asset businesses, becoming the first legislation to regulate digital assets and ICOs in the country. In June 2018, the SEC issued regulations for ICOs, specifying licensing requirements and fundraising thresholds. Satang became the first crypto exchange in Thailand.
– 2019: The SEC approved the first four crypto exchanges in Thailand, providing a framework for their operations. These exchanges were required to comply with anti-money laundering (AML) and know-your-customer (KYC) norms. In July 2019, the SEC granted an additional license to a crypto brokerage firm, demonstrating the government’s commitment to a well-regulated crypto market.
– 2020: The SEC proposed new regulations that mandated crypto exchanges to have a minimum registered capital of $1.6 million and a minimum $1 million digital asset operation fund.
– 2021: The Thailand SEC enforced mandatory identification verification for crypto trading accounts, further strengthening their AML efforts. In June 2021, following a market collapse, the SEC prohibited meme tokens, fan tokens, NFTs, and digital tokens used in blockchain transactions issued by digital asset exchanges or related entities.
– 2022: Thailand considered imposing a 15% tax on digital asset trading. The government also made it mandatory for operators to inform individuals about the risks and volatility of crypto investments, tightening regulations on crypto advertising. In March 2022, Thailand issued rules banning the use of digital assets for payment of goods and services.
– 2023: The Thailand SEC banned crypto lending and staking services as a measure to restrict some of the major decentralized finance (DeFi) products.

2024:
The Thailand SEC has implemented new crypto-friendly regulations by removing investment limits for retail investors in asset-backed digital tokens and introducing stringent rules for custodial wallet management. Previously, retail investors were limited to 300,000 baht per offering in asset-backed ICOs. In mid-January 2024, the Thailand SEC lifted restrictions on digital token investments, signaling its crypto-friendly approach.

The Latest Development
The Thailand SEC has transitioned towards a more crypto-friendly stance. The updated framework was published in January 2024. Digital asset businesses operating in Thailand are required to obtain licenses and comply with SEC regulations. The retail investors’ limit for asset-backed tokens has been removed, allowing greater participation. Entities dedicated to custodial wallet management must be established. Firms seeking growth in the crypto field must obtain approval from the SEC. However, the SEC has decided not to allow spot Bitcoin exchange-traded funds (ETFs) in Thailand.

Taxation Policies
Thailand announced a 15% capital gains tax on profits from crypto trading in January 2022. In March 2022, the Thai government exempted crypto traders from the mandatory 7% value-added tax (VAT) on authorized exchanges. Additionally, investors who invest in crypto startups in the country for at least two years can enjoy a tax exemption of up to 10 years. Income earned from crypto trading or mining is considered capital gains, and the new rules allow traders to offset their annual losses against gains made in the same year. From 2024, Thailand plans to tax overseas income from crypto trading.

Conclusion
As the crypto landscape continues to evolve, countries around the world are constantly adapting their regulations. Thailand has shown its crypto-friendly nature by enacting laws that align with the current crypto landscape. The recent updates in the country indicate its positive stance towards cryptocurrencies. It will be interesting to see what Thailand has in store for crypto enthusiasts in the near future.